How Operational Real Estate Shifted From ‘Alternative’ to Essential — Reflections From My WiPM 2025 Panel

When I started working in real estate development, there was a very simple mental map: residential – office – retail. Full stop.

Everything else – hotels, healthcare, student housing, senior living – sat in the box called “alternatives”: interesting, but too operational, too complex, too niche.

Sitting on the Operational Real Estate panel at PEI’s Women in Private Markets Summit 2025 in London, I realised how completely that mental map has changed.

Operational real estate is no longer a side note. In many strategies, it is the story.

On stage with Lauren Okada Young  ( Brookfield ), Vivienne Howell  ( Civitas Investment Management Limited ) and our moderator Valentina Shegoyan ( OPREIM ), three things crystallised for me – from the perspective of someone who lives professionally between Europe and Saudi Arabia.

These are the three lessons I’m taking back into my collaboration with Coldwell Banker Saudi Arabia, Aetos MFO, and into this ongoing experiment I call Project Within.

Lesson 1: Returns moved from cap rates into operations

For many years, real estate value mainly increased in two predictable ways:

• Cap rate compression — meaning that investors were willing to pay more and more for the same building, so prices naturally went up even if nothing changed in the property itself.

• A bit of rental growth — meaning that rents increased slowly over time, adding some extra value.

This made real estate feel safe and straightforward: buy a building, wait, and it becomes more valuable almost automatically.

But that world is disappearing.

Prices are no longer rising on their own, interest rates are higher, and competition is stronger. Investors can’t rely on “automatic” value growth anymore.

Instead, performance now comes from how well the asset is operated — the business inside the building, not just the building itself.

Lauren described very clearly how, at Brookfield, the answer to low yields and rising costs was not “wait for distress” – but build operating platforms.

Instead of buying a single asset and hoping for a 4% yield to magically become a private equity return, they:

• entered sectors like student housing and holiday parks,

• scaled platforms to critical mass,

• internalised operations,

• and let the operating business generate the additional return that the real estate alone could not.

In other words: the building is no longer enough – you need the business that lives inside it.

From my angle, working with private capital and family offices, I see the same pattern at a different scale.

A family buying a trophy hotel on the Riviera, or investing in a 4★ business hotel in a second-tier city in Saudi Arabia, is not just buying walls and a view. They are buying:

• the brand,

• the operator’s competence,

• the ability to adjust pricing daily,

• and the customer experience that sustains occupancy.

The capital structure still matters. But the real risk – and the real upside – now sits in operations.

If you ignore that, “alternative” real estate becomes genuinely risky. If you embrace it, it becomes essential.

Lesson 2: Who holds the operations changes the whole risk/return story

One of the most valuable contrasts in the panel was between two very different approaches to operational real estate:

• Civitas: long leases to operators, no direct exposure to the operating business.

• Brookfield: increasingly preferring to own and build operating platforms themselves.

Vivienne explained how Civitas invests in healthcare assets typically via 25-year leases to care providers. The investors are buying:

• long-dated, inflation-linked income,

• underpinned by structural demographics and (in many cases in the healthcare sector) public funding,

• with very deep due diligence on the tenant’s expertise and quality of care.

The operational risk is pushed onto the tenant, but the selection of that tenant becomes almost existential. Their healthcare team looks at buildings, of course – but they spend even more energy on operators, local context, regulation, and quality assurance.

Brookfield, by contrast, often chooses to internalise operations once scale is reached. In student housing, that meant moving from third-party operators to a fully integrated platform – and, as Lauren shared, that is where they captured significant margin expansion and value.

Same sectors. Same “type” of asset. Completely different risk/return profiles, simply because of who holds the operating risk.

In my world – between Coldwell Banker Saudi Arabia and Aetos MFO – I often sit in the middle:

• With Saudi developers and landowners, the question is: How do we advise on transactions to ensure the commercial model of an operational asset is viable before the operator even comes into the picture?

• With European and GCC family offices, the question is: Do we lean toward an active, operationally intensive model, or a more passive, long-income lease structure?

Different investors make different choices. But post-WiPM, I am more convinced than ever that:

In operational real estate, capital structure is secondary. Partnership structure is primary. Who runs the asset is no longer an afterthought – it is the strategy.

Lesson 3: In Saudi Arabia, real estate behaves like infrastructure

The question I was asked on stage was about operational intensity in the Middle East: Is it the same dynamic as we see in the UK, US and Europe?

My answer was: yes and no.

Yes – because Saudi Arabia is full of operational assets:

• hotels and branded residences,

• business parks and logistics hubs,

• schools and clinics embedded in masterplans.

But also no – because real estate here is not just “another asset class”. It is the backbone of a national transformation.

Under Vision 2030, Saudi Arabia is:

• pushing tourism from ~5% toward 10% of GDP,

• hosting global sports and cultural events,

• building entirely new destinations along the Red Sea, in the mountains, in heritage cities,

• and rapidly expanding capacity in education, healthcare and logistics.

In this context, real estate becomes almost indistinguishable from infrastructure:

• A logistics hub is not just an industrial asset – it’s part of how a region connects to global supply chains.

• A school or hospital inside a masterplan is not a “nice to have” – it is what makes a community viable.

• A hotel in a new destination is both a business and a signal: “this place is now on the map.”

From an investor perspective, this changes the questions.

Instead of asking: “Is this a core, value-add, or opportunistic deal?”

We increasingly ask: “What ecosystem does this asset unlock, and how aligned is it with the country’s long-term direction?”

At Coldwell Banker Saudi Arabia, our advisory work often looks less like a traditional “brokerage” and more like ecosystem mapping:

• who the future users will be,

• how the asset connects to mobility, tourism, education, logistics,

• which operators and capital partners are needed for the story to hold.

That is why, when I was asked to compare “Dubai vs Saudi”, I said: you are comparing a strawberry to a mango tree – different size, different roots, different yield profile, and a very different patience requirement.

Bringing it back to Project Within

The reason I started Project Within was simple: I didn’t just want to talk about assets; I wanted to talk about people and alignment behind them.

This panel in London was a good reminder that:

• Operational real estate forces us to look behind the façade – at operators, care teams, brands, data and business models.

• It forces investors to choose their role: long-income landlord, platform builder, or something in between.

• And in markets like Saudi Arabia, it forces us to see real estate as infrastructure for a much bigger story.

For me personally, the question that stays is this:

How do we, as advisors to capital allocators, operators and developers, design structures that are honest about risk, ambitious about impact, and respectful of the people who live, learn, heal and work inside these assets?

That’s the space where I want to keep operating – between Europe and the GCC, private capital and operating platforms, vision and execution.

If you were at WiPM 2025 (or work in any operational sector – hospitality, healthcare, education, logistics, student housing), I’d love to hear how you see this shift:

• When you think of long-term value, what types of assets come to your mind?

• Where do you see the strongest long-term demand emerging?

You can reply, message me, or join me in the next Project Within piece – this conversation is just starting.

Big thank you to Charles Gould , Hannah Ogun and the whole PEI team for hosting such a well-curated, high-profile event.